TaxTMI 
TaxTMI 
2023 (10) TMI 1183
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....er adding a sum of Rs. 72,00,000/- under section 68 of the IT Act 1961. 3. For that the appellant craves leave to add, alter or amend any ground before or at the time of hearing of appeal." 3. The sole grievance of the assessee is that the ld. CIT(A) erred in confirming the action of the ld. Assessing Officer while making addition under section 68 of the Act at Rs. 72,00,000/-. Facts in brief are that the assessee is a private limited company having rental income and Nil income declared in the return filed on 17/09/2014. Case selected for scrutiny followed by issuance of notice u/s 143(2) & 142(1) of the Act. During the course of assessment proceedings the assessing officer noticed that the assessee issued equity shares at face value Rs. 10/- and charged premium of Rs. 350/- per share thereby receiving Rs. 2,00,000/- towards share capital and Rs. 70,00,000/- towards share premium during the year. Certain details were called for to examine the identity and creditworthiness of the share applicants and genuineness of the transactions. There was no proper compliance by the assessee. Accordingly the ld. Assessing Officer accepted the share capital of Rs. 2,00,000/- but made ....
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....d by the following four share applicants:- (i) M/s. Servoline Vinimay Pvt. Ltd. (ii) M/s. Goldstar Commosale Pvt. Ltd. (iii) M/s. Pranam Vyapar Pvt. Ltd. (iv) M/s. Rajnandini Vanijya Pvt. Ltd. 7. We notice that during the course of assessment proceedings, the ld. Assessing Officer called for the following details in order to examine the nature and source of alleged sum:- "1. Proof of identity- Voter Card/Passport/Driving License/PAN Card. 2. List of companies where you were directors/shareholders from the A.Y. 2014-15 till date with dates of appointment thereto with your DIN. 3. Proof of acknowledgement of filing the return of income of the company for the A.Y. 2012-13, 2013-14, 2014-15. Also enclose the relevant ledger A/C. 4. Declaration of sources of funds for such payments along with copies of relevant bank statement. Details of immediate source of such funds viz names, complete address and PAN of persons concerned should be furnished. 5. Details of investments made in the said company along with copy of share applications forms. 6. Numbers of shares applied for with details of amounts ....
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....he contention of the ld. Counsel for the assessee as the assessee has submitted all relevant details before the lower authorities and the same has been filed in the form of paper book before us, which contains the following:- M/s. Servoline Vinimay Pvt. Ltd. Copy of Notice u/s 133(6) and its reply along with enclosures consisting: • List of Directors • Income Tax Acknowledgement for Asst Yr 2014-15 • Audited Financial Statements as on 31^st March 2014 • Ledger Account • Bank Statements • Share Application Form • Share Allotment Letter (ii) ROC Master Data M/s. Goldstar Commosale Pvt. Ltd. Copy of Notice u/s 133(6) and its reply along with enclosures consisting: • List of Directors • Income Tax Acknowledgement for Asst Yr 2014-15 • Audited Financial Statements as on 31^st March 2014 • Ledger Account • Bank Statements • Share Application Form • Share Allotment Letter (ii) ROC Master Data M/s. Pranam Vyapar Pvt. Ltd. Copy of Notice u/s 133(6) and its reply along with enclo....
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....g through and discussing about the discrepancies, if any, in the documents furnished by the assessee as well as by the share subscriber companies to prove the identity and creditworthiness of the subscribers and the genuineness of the transaction. The AO has not pointed out in the Assessment Order as to what further enquiries he wanted to make from the directors of the subscribers to insist for their personal presence. The Assessee in this case, as noted above, explained about the identity, creditworthiness and financials etc. of each of the share subscriber company individually. However, we note that in the assessment order that the AO has not even mentioned the names of the share subscriber companies and even has not mentioned a word as to which of the share subscriber company or the corresponding transaction thereof was not genuine and on what grounds. The AO, in our view, could have taken an adverse inference, only if, he would have pointed out the discrepancies or insufficiency in the evidences and details received in his office and pointed out as to on what account further investigation was needed by way of recording of statement of the directors of the subscriber companies. ....
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....n of evidences and possesses co-terminus power of assessment apart from appellate powers. However, a perusal of the impugned order of the ld. CIT(A) shows that the ld. CIT(A) has not discussed anything about the material facts of the case. He has not pointed out any defect and discrepancy in the evidences and details furnished by the assessee but simply upheld the order of the Assessing Officer in mechanical manner. The order of the ld. CIT(A) is a non-speaking order. The same is not sustainable as per law." 11. Further, we note that the ld. CIT(A) while confirming the additions u/s 68 of the Act has relied on the judgment PCIT(Central)-1, Kolkata vs. NRA Iron & Steel Pvt. Ltd. (supra). We note that the Hon'ble Supreme Court in the said case has taken note of the observations made by the Supreme Court in the "the land mark case of Kale Khan Mohammed Hanif v. CIT [1963] 50 ITR 1 (SC) and Roshan Di Hatti v. CIT [1977] 107 ITR 938 (SC) laying down the proposition that the onus of proving the source of a sum of money found to have been received by an assessee, is on the assessee. Once the assessee has submitted the documents relating to identity, genuineness of the transaction, and ....
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....ransaction, the burden shifted upon the Assessing Officer to examine the evidences furnished and even made independent inquiries and thereafter to state that on what account he was not satisfied with the details and evidences furnished by the assessee and confronting with the same to the assessee. In view of this, even applying the ratio laid down by the e Hon'ble Supreme Court in the case of PCIT vs. NRA Iron and Steel Pvt. Ltd., impugned additions are not warranted in this case. 12. Our view is further fortified by the decision of the Co-ordinate Bench of the Tribunal in the case of M/s. Advent Commodities Pvt. Ltd. vs. ITO (supra), wherein under identical circumstances, it was held as under:- "4.2. The legal issue that arises is whether such an addition is sustainable in law as what was brought to tax was only the share premium. 4.3. We now discuss the case law on this issue. The ITAT Kolkata Bench in the case of ITO vs. M/s. Savera Towers Pvt. Ltd. in ITA No. 2275/Kol/2016 for the AY 2012-13 order dated 05/12/2018 held as follows: "6. We have heard the rival submissions. The facts stated hereinabove remain undisputed before us by either of the part....
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....le Delhi High Court in the case referred to supra is not applicable to the facts of the instant case and is factually distinguishable. 6.1. We find that the reliance placed by the ld. AR in the decision of Hon'ble Bombay High Court in Pr. CIT vs. Apeak Infotech reported in 88 Taxmann.com 695 dt 08.06.2017 wherein the question raised before the Hon'ble Bombay High Court are as under: "A. Whether on the facts and circumstances of the case and in law, the Tribunal was correct to uphold the decision on Commissioner of Income Tax (Appeals) that the share premium received by the assessee-company cannot be taxed u/s 68 of the Act ignoring the ratio laid down by this Court in its decision reported in the case of Major Metals Ltd. vs. Union of India [2013] 359 ITR 450 (Bom)? B. Whether on the facts and circumstances of the case and in law, the Tribunal as well as the Commissioner of Income Tax (Appeals) was right in deleting addition made by the AO, by holding that the share premium receipt is capital in nature?" The Hon'ble Court held as under: Regarding Question A: (a) The issue raised by the Revenue in this question is to bring to ....
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....se, the Settlement Commission arrived at a finding of fact that the subscribers to shares of the assessee company were not creditworthy inasmuch as they did not have financial standing which would enable them to make an investment of Rs. 6,00,00,000 at premium at Rs. 990 per share. It was I.T.A. No. 522/Kol/2020 Assessment Year: 2012-13 M/s. Advent Commodities Pvt. Ltd. This finding of the fact arrived at by the Settlement Commission which was not disturbed by this court in its writ jurisdiction. In the present case the person who have subscribed to the share and paid share premium have admittedly made statement on oath before the AO as recorded by the Tribunal. No finding in this case has been given by the authorities that shareholder/share applicants were unidentifiable or bogus. (e) In the above view Question No. A is not being entertained in view of the decision in Tata Chemical Ltd. (supra). Accordingly, the question (A) is not entertained. Regarding Question B: (a) We find that the impugned order of the Tribunal upheld the view of the Commissioner of Income-tax (Appeals) to hold that share premium is capital receipt and therefore, cannot be....